Special Relationships: The Postwar Bequest

Special Relationships: The Postwar BequestAuthor(s): Roy JenkinsSource: Foreign Affairs, Vol. 76, No. 3 (May - Jun., 1997), pp. 200-204Published by: Council on Foreign RelationsStable URL: http://www.jstor.org/stable/20048110 .

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Reflections

Special Relationships

The Postwar Bequest

Roy Jenkins

This is my second opportunity to com

memorate the Marshall Plan. Twenty-five

years ago I received an honorary degree and gave the Harvard commencement

address from the same spot where George Marshall had delivered his reverberating

oration on June 5,1947. There are those

who argue that the plan he unveiled that

day made little difference to Europe s re

covery. The rebuilding of the continent

began before aid started to flow, they say, and would have gone ahead in any event.

As with any reasonable theory, this one

has some evidence on its side?but not

nearly enough. The United States had, with little

publicity, sent Europe large amounts of

aid, mainly in the form of loans, in 1945 and 1946. Postwar American assistance

reached a trough in 1947, coinciding with, though not causing, the economic

and political crises ofthat year. These

economic troubles and the falloff in aid were

particularly dangerous in France

and Italy, where, if not for the fortuitous

presence of strong interior ministers, the

pro-Western governments might have

given way to powerful domestic commu

nist parties. Britain was free ofthat threat, but fuel shortages during that particularly severe winter shut down much of the

country's industry, and the unemploy ment rate temporarily soared.

The next year the economies of

Western Europe picked up significantly, even before they received Marshall aid.

But the governments knew the funds

were coming. Europe may have jump started its recovery before American as

sistance began to flow, but the Marshall

Plan provided a critical element without

which the continent s rehabilitation

Lord Jenkins of Hillheadis Chancellor of Oxford University. He was Home

Secretary and Chancellor of the Exchequer in two Labour governments between

1965 and 1976, and then served as President of the European Community.

[200]




would have stalled: relative freedom from

balance-of-payments restraints. Since the

end of the war, Europe had lived from hand to mouth; its limited recovery had been stimulated by the desperate need for

short-term supplies. Marshall aid en

abled Europe to plan more securely and

to embark on an essential program of

fixed investment. If the Marshall Plan did not prompt the recovery, it served as

the crucial underpinnings.

UNRAVELING ALLIES

Aside from the direct economic effects

and the free transatlantic transfer of bil

lions of dollars (these were certainly not

negligible), the Marshall Plan had sev

eral long-lasting political consequences.

Perhaps most important, it healed the

breach between Britain and the United States that had been threatening their

relationship since late 1945. Immediately after the war, the North Atlantic part

nership suffered numerous buffets. To

American leaders, the British appeared

tiresomely sensitive as they clung, with

increasing difficulty, to their status as a

great power. Britain refused to fall in line

with American foreign policy, and the

rift between the countries grew over rela

tions with the Soviet Union. First Franklin

Roosevelt and then Harry Truman sought to avoid appearing closer to Winston

Churchill than to Joseph Stalin. Although the American government s position

would soon change, it was initially more

hopeful of Soviet cooperation than were

either Tory or Labour leaders. When Churchill delivered his "iron curtain"

speech in March 1946, Truman was less

enthusiastic about it than were the Labour

Prime Minister Clement Atdee and For

eign Secretary Ernest Bevin. And a week

later, Secretary of State James Byrnes offered the hardly heartwarming

com

ment that the United States was no more

interested in an alliance with Britain

against the Soviet Union than in an al

liance with the Soviet Union against Britain. Such an even-handed approach would have been unthinkable under the

team of Marshall and Dean Acheson,

but, while it lasted, it put a considerable

damper on any "union of hearts" hopes in

the British government.

Washington dealt Attlee's Labour

government three heavy blows in its first

six months. First was Trumans abrupt,

unilateral, and almost unintentional ter

mination of lend-lease a week after the

end of the Pacific war. Then came the

failure of the great economist-diplomat

John Maynard Keynes to negotiate a

reasonable replacement for the program.

Keynes had believed the United States would offer a grant or an interest-free

loan of $5 billion to sustain Britain, whose

overseas assets had been liquidated and

whose exports had fallen by two-thirds as

a result of the war effort. But he was able

to get only a $3.75 billion loan, payable over 50 years at two percent interest, and a

stipulation requiring premature sterling

convertibility meant that a large part of

this aid whooshed away to third countries

as soon as the clause took effect in the

summer of 1947. But the British govern ment was too desperate to refuse these

terms. Unlike the Marshall aid, which was a

gift and not a loan, this assistance pack

age created more dissension than gratitude and was not supported in Parliament, even

by the Conservative Party.

Finally, with the severance of the

full exchange of information on atomic

weaponry, which the British believed had

FOREIGN AFFAIRS May/June 1997 Uoi]



Roy Jenkins been secured by the Quebec Agreement of

1943, relations between the two countries

became still worse. Attlee had a reason

ably satisfactory discussion on the matter

with Truman in November 1945, but this

private understanding was not a public

commitment. The United States refused

a formal British request for specific infor mation in April 1946, as Truman pleaded that he was bound by the McMahon Act,

which restricted the sharing of atomic

secrets with other countries. No bitter

public recriminations followed: Britain was too dependent on the United States, and Attlee was not a man to indulge in

luxuries he could not afford. But at the

beginning of 1947, the relationship had little warmth, particularly as the United

States and Britain clashed over Palestine,

where the United States supported the creation of a new state of Israel to re

place the British mandate.

The Marshall Plan was the first step in transforming this atmosphere. It was

followed and supplemented by a joint role in the creation of the North Atlantic

Treaty Organization in 1949, the common

airlift to overcome the Soviet blockade of

Berlin in 1948-49, and the two countries'

embroilment in the Korean War in 1950. But the plan laid the foundation for the

Anglo-American "special relationship." Marshalls gesture of generosity?or, more

cynically, his offer based on excep

tionally enlightened self-interest?became

a reality largely because of the rapid re

sponse of Bevin and his French counter

part, Georges Bidault. The prompt, effective reaction turned Britain, at least

in its own eyes, into an enthusiastic joint

parent of the Marshall Plan. The plan also changed the attitude toward the

United States of the British moderate

left, which had, with the end of the war, come to regard the United States as a

hard, self-interested capitalist power.

Although the nuclear brinkmanship of President Eisenhower s secretary of state,

John Foster Dulles, created strains, the

right and center of the Labour Party and the entire Conservative Party, ex

cept for a chauvinist fringe, were in

stinctively pro-American for the rest

of their political lives. The downside was that Britain became

less amenable to its real status: an elder

and maybe most-favored child, but not a

liberated mother. It was a recipient, not a

donor, yet it tried to behave as though the

reverse were true. There was a mixture of

the splendid and the ridiculous in the British attitude. London led Europe in re

sponding to Marshall s speech, yet, having

led the continent, the British government

sought to detach itself from the rest.

This was a remarkable and depressing

precursor of Britain's relationship with

Europe in subsequent decades. Through out June 1947, British statesmen pushed for a special co-distributor status, but

the ludicrous nature of their aim became

clear in the decisive meeting held that

month. Attlee, Bevin, President of the

Board of Trade Stafford Cripps, and Chancellor of the Exchequer Hugh Dalton?an array of ministers whom

history has judged more impressive than most of their predecessors

or succes

sors?assembled at Downing Street to

argue their case before Under Secretary of State for Economic Affairs Will

Clayton, who was no more than the

third-ranking official in the State Depart ment. Clayton held firm, but his inter locutors did not; they had no ground on

which to stand, and, to their credit, they

[202] FOREIGN AFFAIRS- Volume76N0.3




cooperated enthusiastically even though the terms were not to their liking.

The only practical result of this dispute was that, with compromise an important element in most international negotiations, the British were left a little more free than the continental Europeans in their use

of "counterpart funds," the monies the as

sisted governments received from the sale

of commodity aid in national markets.

Paradoxically, the British, who relied on

these funds mainly for the fiscally respon sible but unimaginative purpose of paying off debt, probably got somewhat less bene fit out of the Marshall Plan than did the others. The French used the counterpart funds for a bold program of investment in their national infrastructure, laying the

groundwork for the preeminence of the

French railway system from the 1950s on

and, more generally, transforming the

rather backward industrial society of the Third Republic into the advanced tech

nological power of the Fifth. The coun

terpart funds allowed the Germans to

pull themselves out of the mire by giving their manual laborers enough to eat for

the first time since the war. At the time

of the announcement of the American

aid offer, German exports were only 19 per cent of their 1936 level and output per head was only 52 percent ofthat level. In

1950, one year after the devaluation of

the European currencies against the dol

lar, German exports rose 162 percent; in

the same period, Britain's exports rose

only 12 percent.

By June 1947 European integration was

already a

major U.S. foreign policy

goal, and the United States was willing to endure some trade discrimination to fos

ter this political objective. The Marshall Plan's integrationist agenda opened a

mild but persistent disagreement between

Britain and America. The Attlee gov ernment could tolerate the European

Payments Union, but the Schuman

Plan for a European Coal and Steel

Community went too far. The (failed)

European Defense Community was too

integrationist and supranational for the

second Churchill government, as was

the European Economic Community, or Common Market, for the short-lived

Eden government. In these early years Britain set a policy of partial detachment

from European integration that would

last for decades. This caused irritation

in Washington, particularly when London

presented its policies as part of the British effort to be a faithful partner with America.

Compared, however, with the more dan

gerous and basic differences of 1945 over

the approach to the Soviet Union, this

disagreement was relatively innocuous.

LUCKY GAMBLE

The Marshall Plan undoubtedly provided a

major impetus toward European unity, and that was one of its great attractions

for the United States. But as the Harvard

speech approached, Marshall made an

important decision, which might have

imperiled this objective, and Truman took some persuading of its wisdom. Aid,

Marshall concluded, must be offered to

all of Europe, not merely to the noncom

munist countries. If Europe was to be

come deeply divided, the deed must be done?and must be seen as done?by

Moscow and not Washington. The

Russians came to the initial Paris meet

ing and allowed their satellites to attend as well. But once there, they made it clear

that they would be delighted to receive American money but only on a bilateral

FOREIGN AFFAIRS May/June 1997 [203]



Royjenkins basis and without any commitment to

economic coordination. When the

United States refused these terms, the

Soviet Union withdrew and took seven

Eastern European countries with it.

Marshall's calculated risk came off.

It was lucky that the Soviet foreign minister, Vyacheslav Molotov, did not re

main in Paris, half cooperative and half

sullen. Had he stayed, the venture would

probably have led only to some limited transfer of funds from the United States

to Europe and then run into the ground.

Furthermore, had Marshall's gamble failed and had the Russians welcomed a

full cooperative effort, the plan might have become an assuaging force in East

West relations, but it would not have

served to help unify Western Europe, for a federation extending from Paris to

Moscow was not remotely feasible. Such

an impasse might have eased the prob lems of successive British governments in their efforts to keep their country half

in and half out of Western Europe, but

it would not have aided the remarkable

economic resurgence of the 1950s and

1960s in Germany, France, and the

countries clustered around them, or the

almost miraculous Franco-German rap

prochement in the 1970s. The Marshall

Plan would have remained an exceptional

example of the confluence of generosity and enlightened self-interest. But it

would not have had the formative psy

chological and political impact that is its legacy.?

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